Fresh signs of housing slowdown

Tuesday 6 November 2001 00:00 BST

FRESH evidence of the slowdown in the housing market has emerged, with Halifax reporting a 0.5% drop in prices last month. The country's biggest mortgage lender blamed slowing economic growth, growing job losses and the knock to consumer confidence following the terrorist attacks in the US.

But the decline was less than the one seen in October last year, and as a result annual house price inflation increased to 9.4% for the year to the end of October, from 8.8% in September. The figures match the 0.5% drop reported last week by Nationwide.

Halifax group economist Martin Ellis said: 'House price movements over the past few months as a whole indicate a clear downward shift in the underlying trend, with prices increasing at a somewhat slower pace compared with earlier in the year.

'This is consistent with reports from estate agents and house-builders and the latest market figures on the number of mortgage approvals, which all show signs of a slowdown in housing market activity.'

But the group still expected house prices to rise during the coming year, although at a slower pace. 'Continuing economic growth, low interest rates and housing affordability levels that are not stretched should support the housing market,' Ellis added.